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Case Assessment: Manhattan Insurance Fraud Arrests Nab Three Including Physician

Aquaman never had to come up to breathe and it appears that Manhattan District Attorney Cyrus Vance, Jr. does not either. DA Vance’s Super Friends clearly have no interest in catching their collective breath as they continue to relentlessly pursue those believed to be the Legion of Doom’s villinious associates. Whether it is fighting crime in the streets, or, as his predecessor Robert Morgenthau coined during his thirty plus year tenure, “crime in the suites,” the Manhattan DA’s Office continues to unequivically display its lack of tolerance for criminal shenanigans. According to their latest press release, Sudha Kailas, Herlina Luis and Janice Sich are the unfortunate recipients of this zealous pursuit of all things allegedly criminal. The arrests in New York of Kailas, Herlina and Sich are merely a minuscule fraction of the white collar theft and fraud cases brought by the Manhattan District Attorney’s Office over the past few months.

It is alleged by prosecutors that Kailas, Luis and Sich, who are charged with Grand Larceny, Insurance Fraud and other crimes, defrauded insurance companies and employment health plans out of nearly a half a million dollars (it appears as if the cases are separate). While likely only a “drop in the bucket” of an unsympathetic insurance company’s finances (some might argue they steal from us), the reality is that any fraud victimizes tax payers and other law abiding citizens who pay into these programs. Certainly, if true, a theft of this scale is not one that is insignificant or can be ignored by law enforcement and is understandingly the target of many agencies.

According to the District Attorney’s Office, it is believed that Kailas, Herlina and Sich were each involved in scheming insurance companies as well as employment health plans by submitting hundreds of fraudulent claims of mental health treatment that they never received or that was inflated in price. Kailas, a psychiatrist, allegedly made false claims that she paid in excess of $50,000 for mental health treatments she did not receive. In total, prosecutors believe 206 reimbursement claims where made to OptumHealth Behavioral Solutions that were paid out. In addition, Kailas is alleged to have made another 19 claims for real services rendered, but she inflated the amount paid to doctors. In total, her alleged theft from OptumHealth Behavioral Solutions was just in excess of $30,000.

Luis, another one of the individuals arrested for a Grand Larceny and Insurance Fraud scheme, worked for Exent Technologies and was insured with OptumHealth Behavioral Solutions. Luis is accused of submitting north of 1,000 bogus claims. Compounding matters, not only did Luis receive significantly more than Kailas ($257,000), but both the services she received as well as the physician who is alleged to have provided them were both non existent.

The last individual arrested, Sich, was an employee of Pfizer. During a five year period, it is alleged that Sich submitted more than 1,700 false claims and additional 38 claims that exaggerated costs. In total, prosecutors believe Sich was reimbursed nearly $354,000.

Kailas and Luis each face multiple felonies including Insurance Fraud in the Second Degree (New York Penal Law 176.25). Although not an exact definition, you are guilty of Insurance Fraud in the Second Degree if you commit a Fraudulent Insurance Act and you wrongfully took or obtained in excess of $50,000, but not more than $1 million. “Fraudulent Insurance Act” and “Fraudulent Health Insurance Act” are legally defined terms in the New York Penal Law (to understand these terms follow the link above). Second Degree Insurance Fraud is a “C” felony.

In addition to the Insurance Fraud, Luis and Sich are charged with Grand Larceny in the Second Degree while Kailas is charged with Grand Larceny in the Third Degree. New York Penal Law 155.40 and New York Penal Law 155.35 involve the theft of property (money in this case) in excess of $50,000, but no more than $1 million and in excess of $3,000, but no more than $50,000 respectively. Second Degree Grand Larceny is a “C” felony while Third Degree Larceny is a “D” felony.

Although there are other crimes, the remaining arrest crime charged that is shared between Kailas, Luis and Sich is Falsifying Business Records in the First Degree (New York Penal Law 175.10). In substance, this crime is committed when a person intentionally falsifies the records of a business enterprise with the intent to hide another crime or commit another crime. In this case those crimes would either be the Grand Larceny or the Insurance Fraud. Falsifying Business Records is an “E” felony.

Obviously, an arrest is merely an arrest. In other words, an arrest is not proof of guilt. There may be defenses to the allegation or mitigation may be an appropriate route. Whatever the defense, it is likely these defendants are actively and aggressively pursuing it. The defendants have little choice to forward some defense or mitigation because If they are ultimately convicted of these crimes, the defendants would face up to one and one third to four years in prison on the “E” felony, two and one third to seven years on the “D” felony and five to fifteen years on the “C” felony.

To better understand the crimes mentioned in this entry as well as other related white collar crimes, follow the links above to the respective information pages on Crotty Saland PC’s websites. Additionally, the blogs entries contained in the NewYorkTheftAndLarcenyLawyersBlog.Com as well as the NewYorkCriminalLawyerBlog.Com have significantly more information, legal analysis and case assessment.

Founded by two former Manhattan prosecutors, the New York criminal defense attorneys at Crotty Saland PC represent clients arrested for white collar, larceny and fraud crimes throughout New York City and the region.

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